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Spot prices of propylene rebound higher
11
Jan '11
Spot prices of Asian propylene rebounded higher in the just concluded week, supported by upstream naphtha price, plus recent reduction in supply, because local plants are under maintenance or upcoming maintenance in the first and second quarters.

Arbitrage window for shipment to the United States is closed; U.S. propylene price is higher due to tight supply and strong demand. It is reported that 10,000 tons cargo will be shipped to the United States from Northeast Asia in January, but the news has not been confirmed.

Supply in Chinese market remained excessive, due to severe congestion at major Chinese ports, which hard-pressed the market. Major buyers were in the sidelines, due to weak domestic prices, import price of propylene was US $1300/ ton (CFR China), while offers were down to middle level of US $1300/ ton (CFR China), price trend looked optimistic.

Spot prices of propylene are expected to remain bullish, especially in early February after the Chinese New Year holidays, when buyers will return to market to replenish stocks, while South Korea, Japan and Indonesia plan to stop cracking plants, which will also support the market, sources, said.

Asian naphtha contract prices for the second half of February fell on Friday; the spread of naphtha fell to 4-day low at US $170.48 / ton. A cargo with shipment in the first half of March was traded at US $871.50 / ton (CFR Japan) in previous time. Main derivative PP price rose US $10-20 to US $1460-1500 / ton (CFR China).

In Northeast Asia, spot price was assessed at US $1300-1340 / ton (CFR Northeast Asia), reflecting the level of transaction and quotation.

In China's domestic market, propylene price in Shandong was basically at 10350-10450 Yuan / ton (ex-warehouse) in earlier time of the week, price rose 150 Yuan in the second half, it was said that trade level of the previous week was 10600-10650 Yuan / ton (delivered within Shandong), as local refineries shut down in the New Year holiday period.

In the FOB Northeast Asia market, offers rose to US $1,300 / ton (FOB Korea), but purchase interest was limited. Buying intention was below the middle level of US $1,200 / ton (FOB Korea); FOB Japan was below US $1,200 / ton, as the market generally accepts CFR for transaction.

In FOB Southeast Asia, it was said that a cargo from Singapore was traded at US $1,180 / ton (FOB) with shipment in January. Purchase intention rose to the middle and high level of US $1100 / ton (FOB South East Asia), consistent with market trend in China.

Fibre2fashion News Desk

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